South Korea weighs fourth crypto tax delay, with 2029 start tied to US data
South Korea is considering delaying its 22% tax on crypto gains for a fourth time, with a 2029 start date gathering support because the United States does not begin sharing crypto transaction data until that year. The levy is currently due to take effect on 1 January 2027.
The presidential office said it is in talks with government agencies about a delay, pointing to gaps in the regulatory framework and the difficulty of treating domestic and overseas trades the same way, according to Token Times. The tax dates to a 2020 amendment to the Income Tax Act and applies a 20% national rate plus a 2% local rate to annual income from transferring or lending virtual assets above a 2.5 million won ($1,888) deduction. Its start date has already slipped from 2022 to 2023, 2025 and 2027 as officials conceded tax systems and investor protections were not ready.
The case for 2029 rests on the OECD's Crypto-Asset Reporting Framework, under which tax authorities swap crypto transaction records. South Korea is in the first group of jurisdictions due to begin exchanges in 2027; the United States does not join until 2029. A presidential office official told Token Times that the absence of US trading data is the biggest bottleneck, since without it the National Tax Service would have to chase overseas transactions one by one, leaving Korean traders on domestic exchanges with a heavier burden than those on foreign platforms or in self-custody.
On 16 October, Democratic Party lawmaker Park Min-gyu and 13 colleagues filed a bill pushing the tax to 1 January of the second year after the first international data exchange, which works out to 2029. People Power Party lawmaker Song Eon-seok filed a separate bill to strike the crypto tax provisions entirely. The Korea Digital Asset Business Association backed the 2029 date on Thursday and asked the government to pass a digital asset law with stock-market-grade investor protections before any tax takes effect.
Pressure has built from several directions. Two public petitions, one to repeal the tax and one to defer it two years, each cleared the 50,000 signatures that force a legislative review. Democratic Party leader Kim Min-seok called for a thorough final review, a shift for a party that had held the line on 2027. Finance Minister Lee Hyeong-il told a parliamentary audit on Thursday the government would decide after carefully considering and gathering all opinions from the industry and the National Assembly, while Financial Services Commission chairman Lee Eog-weon said the tax should take various circumstances into full consideration. The Virtual Asset User Protection Act took effect in July 2024, but the Digital Asset Basic Act, the licensing framework flagged alongside spot bitcoin ETF approval, has not passed, and lawmakers have questioned taxing a market before the law defining it exists. The National Tax Service has not slowed down: it plans to publish a draft notice on taxable crypto income by the end of October, with the government expected to settle its position through National Assembly tax revisions between late November and early December.
